IMPLICATIONS FOR FUTURE RESEARCH
Based on our research several important implications exist for future research. Our first hypothesis, stated that the analysis of growth patterns yields interesting results in terms of identifying the antecedents and correlates of new venture growth. For example, previous research specifies that multiple founders are better. However, the analysis of growth patterns suggests support for that position case only when founding teams remained stable. The claim that multiple founders are better assumes that access to the resources and competencies of multiple founders is an ongoing condition and will not result in dysfunctional infighting and eventual costly buyouts. More research should focus on the formation and continued functionality of startup teams.
The finding that major new product innovations were preceded by the acquisition of new personnel also represents a significant new insight. We established the importance of acquiring employees with new technical abilities or knowledge of markets using in-depth cases, but testing such relationships requires analyses in larger data sets. We caution business founders, however, about hiring new personnel with the prospect of hitting a home run--founders oftentimes express disappointment about not getting what employees promise. Identification of key employees occurred only after their innovations proved to be valuable. It is far more difficult to identify key contributors before they have made a substantial contribution to the organization.
Likewise, most of the research with respect to new venture growth attempts to assess ongoing conditions rather than discrete events. A number of researchers have stated that opportunities may be more abundant in rapidly growing industries or where there have been substantial legislative or regulatory changes (e.g. Hambrick and Lei, 1985;Hofer, 1975; Hofer and Sandberg, 1987). However, there has been little mention of the possible risk associated with such opportunities. Regulatory changes can create overnight opportunities, likewise, such changes can also destroy such opportunities overnight. Additional research might focus on the stability of markets created by regulation, technology, or other rapidly changing events.
Our analysis of the relationship between performance at one time period and subsequent performance provides some additional insights. First, the assumption that more is better does not appear to be ill founded. The relationships between 1990 sales growth and 1994 sales growth was relatively weak, but appears to be linear. In other words, firms with low sales growth in 1990 are significantly more likely to have continued slow sales growth in 1994. Companies with rapid sales growth in 1990 are more likely to have continued rapid sales growth in 1994. Hence, our second proposition was unsupported.
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